BY DANIEL DAVIS, D&V MORTGAGE
FANNIE MAE JOINS FREDDIE MAC IN ALLOWING APPRAISAL FREE PURCHASE MORTGAGES
Freddie Mac announced in August that beginning September 1, 2017, they will now allow certain purchase mortgages to
NOT require an appraisal to complete the transaction. One week later, Fannie Mae followed suit in allowing appraisal free
purchase mortgages on certain transactions beginning immediately. Transactions are limited to loans that have LTV (loan
to value) ratios of 80% or less, and most transactions with a down payment of 20% or more are still expected to require an
appraisal. Transactions that do not require an appraisal are given a PIW (Property Inspection Waiver) which are granted by
valuing the property through algorithms and databases of existing data compiled by millions of existing appraisals. Over
the first couple months, the number of homes that have been granted a PIW has been quite small according to several
local mortgage experts. However, many experts in the industry do expect the percentage of homes with at least 20% down
payment that will require an appraisal is trending downward. Moving forward into 2018, it will be interesting to see how
this will affect both the finance and appraisal industry.
LOAN LIMITS INCREASE FOR 2018
The Federal Housing Finance Agency (FHFA) recently announced that the maximum conforming loan limits for mortgages
acquired by Fannie Mae and Freddie Mac (Conventional Conforming Loans) will increase in 2018. In most of the country,
including Lee County, the maximum loan limit for one-unit properties will increase from $424,100 to $453,100.
Soon after the FHFA announcement, the Federal Housing Administration (FHA) followed the trend of increasing loan limits,
announcing that the maximum FHA loan amount will also be increased for 2018. The FHA announced that the “floor”
would be increased from $275,665 to $294,515, which will be the limit in Lee County for one-unit properties. The ceiling
for FHA mortgages in higher cost areas has also increased from $636,150 to $679,650. This is the second consecutive year
that conventional conforming and FHA loans have increased, with 2017 being the first increase in baseline loan limits since
2006.
10 RPCRA.ORG | JAN/FEB 2018